solution

The Asian country of Tamoa imports large quantities of down pillows each year. DownPillow, a U.S. company, wants to do more business there; however, Tamoa has a number of regulations affecting the importation and sale of down bedding. Consider the following five regulations:

a. Pillows made from down harvested from Tamoan flocks may be labeled as “goose down,” even though they may contain up to 25 percent duck down. If the pillow is made from foreign down, then a pillow labeled “goose down” may contain no more than 5 percent duck down. Duck down is a cheaper alternative to goose down. Virtually all U.S. state regulations permit goose down to contain up to 10 percent duck down.. Tamoa believes that the stricter standard for imported pillows is justified to protect Tamoan consumers from fraud.

b. Tamoa also requires that the cotton coverings of all pillows be certified to meet certain ecology and human health standards for textiles: they may not contain any harmful chemicals, such as formaldehyde or chlorine, and they must be tested according to minimum standards set by the International Organization for Standardization. Certifications are accepted from qualified testing laboratories in any country. U.S. regulations do not require certification.

c. All pillow imports must be inspected on arrival in Tamoa. No inspections are permitted at the foreign factory. Tamoa has only one full-time inspector, who must remove down from at least three pillows from every shipment and subject it to laboratory analysis. Given the current backlog, inspections and analysis are taking up to four weeks, during which time the pillows are often damaged by Tamoa’s high humidity.

d. Tamoan regulations also require that DownPillow’s plant be inspected and that the sterilization process be approved by Tamoan officials. In the United States, the down is washed, sanitized, and subjected to hot air heat several hundred degrees in temperature, all under health department supervision. The Tamoan ministry of agriculture refuses to accept the sterilization permits, inspections, and approvals from state health departments in the United States. Tamoa does not pay the overseas travel expenses of its inspectors.

e. Tamoan regulations prohibit pillows and comforters from being compressed or vacuum packed for shipment to ensure the down will not be damaged in shipment.

DownPillow ships smaller orders by air freight and larger orders by ocean container. DownPillow and other U.S. firms are not pleased with these requirements. Evaluate the legality of the regulations and their impact on DownPillow. What course of action should DownPillow take?